Crypto for Good: How Glo Dollar Plans to Use a Stablecoin to Help End Extreme Poverty
“Crypto allows us to to embed values within money.”
![Crypto for Good: How Glo Dollar Plans to Use a Stablecoin to Help End Extreme Poverty](https://images.squarespace-cdn.com/content/v1/625d6a69c3ee27183378cba8/1681493126927-UQMIX0B7FBB499MD70WB/Jasper+Driessens.png)
About 650 million people in the world subsist on less than $2.15 a day, the definition of extreme poverty. That’s about twice the U.S. population and while the solution to extreme poverty is known – providing a basic income – scaling the amount of money needed is a problem that hasn’t been solved.
That’s where Glo Dollar comes in. It’s a stablecoin that plans to donate all its interest income to the charity GiveDirectly that will then in turn distribute the money to those in extreme poverty.
“We have this giant problem of all these people in extreme poverty and we actually already know what to do – give them basic incomes – and that is now being done at the scale of several hundred thousand people, and it seems to work,” Jasper Driessens, co-founder and chief marketing officer of Glo Dollar, said to me recently. “So, what should we do to scale that up to lift millions of people out of extreme poverty?”
Cryptocurrency, and specifically stablecoins, are well suited for the task, Driessens said. That’s because a stablecoin like Tether is sitting on $80 billion and the profit in the form of interest income from that invested money is estimated to be about 2.7 percent, or $2.2 billion. If a stablecoin like Glo Dollar could grow to that same size that’s billions going directly to help the world’s poorest people.
“If we get this thing to scale we’ll be lifting millions of people out of poverty,” Driessens said.
Glo Dollar’s web site
The startup plans to invest the money it receives for Glo Dollars into short-term Treasury bonds or to be kept in cash. The company plans to start operating this year, but several hurdles exist. The first is obtaining money transmitter licenses in every U.S. state where Glo Dollar wants to operate, a slow and costly endeavor. Finding banking partners in the current anti-crypto environment is also challenging, he said. There is also regulatory uncertainty around stablecoins; registering with the U.S. Securities and Exchange Commission is a lengthy process that doesn’t necessarily guarantee protection from U.S. authorities.
Glo Dollar traces its roots to Sid Sijbrandi, the billionaire founder of GitLab. Sijbrandi donated $10 million to GiveDirectly, which he figured could help get five million people out of extreme poverty for one year, Driessens said. But that’s a drop in the bucket compared to the 650 million in need of help, so Sijbrandi funded Glo Dollar with $2 million last year to get it off the ground. Glo Dollar operates as a non-profit and relies on donations for it operating costs, which it decided not to take from any of the money raised by selling Glo Dollars, Driessens said.
And in a time of seemingly endless stories of fraud and losses in crypto, Glo Dollar provides a rare positive story.
“Glo is probably the least controversial project one could work for or be involved with” in crypto, Driessens said. “No one’s getting rich here.”
Another factor last year that helped push Glo Dollar to its current business plan was when interest rates began to rise. The yield on government debt has risen to between 4 to 5 percent, creating a much better return on interest income. Yet at the same time, the algorithmic stable coin Terra/Luna blew up, showing the risks that exist in the market.
“That wasn’t necessarily a definitive data point, because we’re not going to do something that looks like Terra/Luna,” Driessens said. “It did show that things can go wrong in a terrible way unless you have a very strong model.”
Even if Glo Dollar doesn’t reach the marketcap of Tether or USDC, it will still help ease poverty by whatever use it does obtain, Driessens said.
“Any adoption growth leads to less people in extreme poverty and it’s pretty hard to imagine that without crypto,” he said. “Crypto allow us to embed values within money.”